Business Creates Eco-Side!
Natural Capitalism is so informative and provocative--and so unfashionably optimistic about the future of the planet--that I wonder why everyone in public life is not reading it and arguing over the implications. The President did volunteer a nice plug for the book when it came out a few months ago, but it has yet to be reviewed by virtually any leading publication. Literary culture doesn't grasp the high drama of industrial engineering. Newspaper editors, like other Americans, are transfixed by business stories about moguls and supermoguls from this gilded age and the previous one.
The book will find its audience, regardless. It is that important. The authors are setting out a boldly different framework for understanding the ecological crisis. It goes like this: The scale and pace of nature's destruction are far more life-threatening than is commonly understood, yet should not be regarded as overwhelming. The basis for a fundamental transformation of industrial capitalism--new business concepts and technological processes that can save the earth--already exists, not just as wishful theory but as a set of successful and even spreading practices. These new approaches to production and consumption will redefine economic life, not out of noblesse oblige but because they deliver dramatic cost-saving efficiencies to the bottom line, that is, higher rates of return for capital.
This perspective has something to offend nearly everyone: Business interests will choke on the apocalyptic description of the earth in crisis but may be flattered by the suggestion that they have the means to solve it. Most environmentalists agree on the vast dimensions of the threat to nature but may dismiss the authors' can-do optimism as dangerously naïve. I have particular doubts of my own. Nevertheless, Natural Capitalism poses an intelligent challenge to lazy assumptions on both sides of the political divide and ought to jump-start a reinvigorated environmental debate.
Paul Hawken is a rare type--a green entrepreneur who built a successful enterprise, Smith and Hawken, on eco-friendly terms and who wrote The Ecology of Commerce. The Lovinses are co-CEOs of the Rocky Mountain Institute, which over a generation has famously generated a stream of innovative ideas about how to save resources and eliminate the vast industrial waste commonly known as pollution. If you know their previous works, a lot of this will sound familiar. Indeed, Natural Capitalism recapitulates important "new ideas" of the past two decades that are well-known to serious ecologists on several continents, though not to the American public or its political elites. The weight of this book lies in its comprehensive argument: Ecological destruction is essentially a problem of system design that can be solved. The evidence for this proposition is accumulating within business itself, and the book describes scores (maybe hundreds) of startling examples.
The tone is slightly off-putting because it resembles the brisk self-confidence of a business-management primer, but the authors are clearly trying to convince corporate managers and investors, not eco-activists. Still, their larger objective is radical. "Technology is revolutionizing our lives," they concede, "[but] our purpose is almost the opposite. We are trying to describe how our lives and life itself will revolutionize the technologies."
They start with the great fallacy of orthodox economics exposed by economist Herman Daly in his landmark work For the Common Good more than a decade ago. Natural capital--finite elements of the earth itself: land, air, water, the multitudes of self-sustaining biosystems--does not appear anywhere in the account books of capitalism. In the orthodox economist's model, nature is treated as an infinite resource to be used as input for manufacturing and other human activities (when one mineral is exhausted, another will be found to replace it). Nature is "free" except for costs of extracting, transporting, altering it. Nature is also a bottomless sink where the wasted materials are dumped. Among many startling facts in this book is the estimate that in the vast flows of natural materials devoured by the US economy every year, only 6 percent actually end up in products.
In real life, the economic model is nutty on this subject. But the system of false accounting endures as a profitable illusion--everything is made to seem cheaper than it truly is--and very few "scientific" economists have the courage to challenge it. If the world's accountants accepted that "natural capital" is neither free nor infinite, the full crisis would become clear. Industrial capitalism (including all of us who consume its output) is rapidly devouring the one form of capital that cannot be replaced--not just air, water and the land's raw resources but the life-supporting ecosystems themselves. Climate change and global warming are a subset, not the whole, of what threatens. The evidence is frightening, but the point of this book is not to scare people.